How a Koch-backed veterans group gained influence in Trump's Washington

Andrew Harnik / AP

White House physician and nominee for Veterans Affairs Secretary Dr. Ronny Jackson arrives at the annual White House Easter Egg Roll on the South Lawn of the White House in Washington, April 2, 2018.

White House physician and nominee for Veterans Affairs Secretary Dr. Ronny Jackson arrives at the annual White House Easter Egg Roll on the South Lawn of the White House in Washington, April 2, 2018.

(Andrew Harnik / AP)

Michelle Ye Hee Lee, Lisa Rein and David WeigelWashington Post

As Veterans Affairs Secretary David Shulkin battled last month to keep his job, his fate hinged in part on a once-obscure advocacy group backed by billionaire industrialists Charles and David Koch.

In the end, Shulkin's refusal to pursue greater outsourcing of health care for veterans - the top priority of the Koch-backed Concerned Veterans for America - further alienated him from the group's allies in the Trump administration and contributed to his ouster, according to officials familiar with the situation.

The VA secretary's fall underscores the growing clout that CVA is wielding in the Trump era through a national grass-roots network and sympathetic officials in the White House.

What began as a savvy political strategy - tapping veterans as a potent constituency and seizing on bureaucratic failures at the Department of Veterans Affairs to hammer the Obama administration - has transformed CVA into one of the most muscular arms of the conservative Koch network.

Since its formation seven years ago, the group has racked up major legislative victories and poured at least $52 million into campaigns and policy work, according to tax filings.

In a sign of its influence, President Donald Trump recently echoed a key talking point of the group on the need to expand VA's "Choice" program, which gives veterans access to private doctors. "We want them to have choice so that they can run to a private doctor and take care of it," the president said at a rally in Ohio the day after Shulkin's firing. "And it's going to get done."

Concerned Veterans for America is now positioned to shape the priorities of Trump's new VA nominee, Ronny Jackson, a little-known presidential physician with scant policy or political experience. And the group is gearing up to be a big player again in the congressional midterm elections, investing $3 million so far this cycle attacking vulnerable Senate Democrats as weak on veterans issues - with millions more likely to come.

But CVA is setting its sights even higher. In its most ambitious campaign yet, the organization said it is embarking on a long-term effort to transform some of the nation's most costly policy investments by remaking VA - the country's largest health-care system - and the financing of the nation's military. The group said it wants to cut what it views as wasteful defense spending, such as funding underused military bases.

Driving the organization is the stark libertarian philosophy of the network's founder, Charles Koch, who has long sought to curtail the reach of the federal government.

Patrick T. Fallon / Getty Images

Charles Koch speaks during an interview with the Washington Post at the Freedom Partners Summit on Aug. 3, 2015 in Dana Point, Calif. Concerned Veterans for America has become one of the most muscular arms of the conservative Koch network.

Charles Koch speaks during an interview with the Washington Post at the Freedom Partners Summit on Aug. 3, 2015 in Dana Point, Calif. Concerned Veterans for America has become one of the most muscular arms of the conservative Koch network.

(Patrick T. Fallon / Getty Images)

"This isn't a one-year fight. This isn't a two-year fight. This is a fight that is going to extend beyond the Trump administration," said Dan Caldwell, CVA's executive director and a Marine Corps combat veteran who served in Iraq. "When a system isn't working well, it's not just wasting taxpayer money; it's hurting our warfighters."

CVA's critics - including the congressionally chartered veterans groups - acknowledge the need for some private care, but they argue that unfettered privatization would be costly and siphon resources from the VA system.

Ryan Gallucci, director of national veterans services for Veterans of Foreign Wars, said that CVA does not represent the views of veterans, noting that VFW members report in surveys that they are happy overall with VA health care, despite its challenges.

"What they report doesn't match up against what our members tell us," Gallucci said. He said he is worried that CVA's agenda would hurt veterans.

"The notion of giving them a card to take anywhere is, quite frankly, a cop-out," he said. "It becomes downright dangerous. You need someone coordinating their care."

The traditional advocacy groups, which have been the dominant representatives of veterans since World War II, view Concerned Veterans for America as an interloper driven by the views of its wealthy backers, not average veterans.

"They're a political lobbying firm," said Louis Celli, national director of veterans affairs and rehabilitation for the American Legion, the country's largest veterans group. "They're not a veterans organization. They're using veterans issues as a tool to push a political agenda."

In media interviews after his ouster, Shulkin blamed his removal on forces that would benefit from a diminished government health-care system for veterans.

"I just don't see privatization as a good thing for veterans," he told PBS's "NewsHour" the day after his dismissal. "I think those that are really sticking to a political ideology are doing this for other reasons, like financial reasons, [and] don't have the interests of veterans at heart."

Andrew Harnik / AP

In this March 7, 2018, photo, Veterans Affairs Secretary David Shulkin speaks at a news conference at the Washington Veterans Affairs Medical Center in Washington. Shulkin is making it clear he was fired from his job amid conflicting claims from the White House.

In this March 7, 2018, photo, Veterans Affairs Secretary David Shulkin speaks at a news conference at the Washington Veterans Affairs Medical Center in Washington. Shulkin is making it clear he was fired from his job amid conflicting claims from the White House.

(Andrew Harnik / AP)

As a politically active nonprofit organization, Concerned Veterans for America is not required to disclose the names of its donors. Koch officials declined to respond to the suggestion that the group's financial backers would profit from the outsourcing of veterans' care.

Koch officials noted that CVA never publicly called for Shulkin's firing. And they argued that the group should be credited for drawing national attention to bureaucratic failures that hurt veterans.

"Part of CVA's tremendous growth has been on delivering really good reforms at the VA," said network spokesman James Davis.

Concerned Veteransfor America was formed in 2011 as a nonprofit group named Vets for Economic Freedom Trust, and was seeded withnearly $2 million from Koch network donors, tax documents show.

In its early days, the organization presented itself as a full-service veterans advocacy group. But it also tackled issues outside the usual fare of veterans groupsto focus on touting conservative policies that were top agenda items of the Koch network.

Ahead of the 2012 election, founding president Pete Hegseth - now a Fox News contributor - argued that the issue that most worried veterans was the national debt.

The implementation of the Affordable Care Act gave CVA an opening to go after the failures of big government. The group attacked the early technical problems of the website set up to help people enroll in the new health-care exchanges.

"It took the federal government more time to build a website than it took from the time Pearl Harbor was attacked to when Germany surrendered in World War II," a narrator said in a CVA ad. "Government-run health care doesn't work."

When managers at the Phoenix VA hospital were found to have fudged wait lists for veterans' medical appointments in 2014, CVA was among the first groups to organize a rally in Arizona to call on Congress to investigate claims that dozens of patients may have died while waiting for care.

The Phoenix scandal ballooned into a national crisis after VA's inspector general found systemic problems involving delayed medical care for veterans across the country. Then-VA Secretary Eric Shinseki eventually stepped down amid a CVA-led campaign demanding his resignation.

In the 2014 midterms, CVA featured the wait-time scandal in a large ad campaign and financed a "Get Out The Veteran" tour designed to drive up conservative turnout.

"Secret waiting lists. Veterans dying without seeing a doctor. The way government-run health care harmed our veterans at VA shows the threat government-run Obamacare is to all of us," intoned one television ad aimed at Sen. Mary Landrieu, D-La., who would go on to lose a reelection bid.

In all, the group spent $20 million on electoral and policy work during that cycle, officials said.

CVA also began pushing a specific policy agenda, calling for a "VA accountability" bill to make it easier to fire employees and "choice" legislation to give veterans more options for health care outside of the VA system.

The group also is seeking to fundamentally change whose costs the government will pay for by restricting the number of veterans eligible for VA health care.

Last June, Congress passed a VA accountability bill - which Trump signed while flanked by CVA officials. Lawmakers also have authorized billions of dollars for private care outside VA in the wake of the 2014 scandal. Concerned Veterans for America is now pushing an expansion of the "choice" program, which the White House has called a top priority.

That message has been repeatedly echoed on Fox News by Hegseth, an informal Trump adviser who was discussed at one point as a possible candidate for VA secretary.

Evan Vucci / AP

Fox News contributor Pete Hegseth walks to an elevator for a meeting with President-elect Donald Trump at Trump Tower in New York, Dec. 15, 2016. Hegseth was founding president of Concerned Veterans for America.

Fox News contributor Pete Hegseth walks to an elevator for a meeting with President-elect Donald Trump at Trump Tower in New York, Dec. 15, 2016. Hegseth was founding president of Concerned Veterans for America.

(Evan Vucci / AP)

More than one-third of veterans enrolled in the VA system - which serves 9 million veterans a year through 1,200 hospitals and clinics - now receive care from private doctors. But CVA's ultimate goal is to give every veteran the option to see a private doctor at government expense and create a nonprofit government corporation to oversee VA's medical facilities, officials said.

"What we want to do is create a strong VA that offers veterans a good choice, but not be their only choice," Caldwell said. "We want to give veterans the option to vote with their feet."

CVA's aims - once considered fringe in the veteran community - have gone mainstream under Trump.

Even though the Koch network pointedly refused to endorse Trump's White House bid in 2016, his campaign ended up adopting major CVA policy priorities. One key ally of the group was former GOP congressman Jeff Miller of Florida, a Trump campaign adviser who served as chairman of the House Veterans' Affairs Committee. Miller did not respond to a request for comment.

After the election, former leaders of CVA and other Koch officials secured key posts inside the administration. In one pivotal appointment, Darin Selnick, a former senior CVA adviser, was tapped to be the administration's most influential voice on veterans policy and serve as the White House's veterans affairs adviser.

Current and former White House officials said that CVA is among a number of veterans groups that have a voice in the administration, and said Trump's views on veterans policies have been driven by his own observations on the campaign trail.

"The bottom line is, the White House is going to work with organizations that support the White House," said Selnick, who recently left his post to return home to California. "CVA has been very supportive of the White House, so they're going to have a seat at the table."

Shulkin, who had served as a top VA official in the Obama administration, initially had the support of Concerned Veterans for America, which was "optimistic" about his appointment, Caldwell said.

The new secretary began posting wait times for appointments and quality measures at VA's 1,200 medical centers. He pushed the accountability legislation, which cleared a fast path for VA to fire employees involved in misconduct.

"People thought he was very reform-minded. We were on very friendly terms," Selnick said.

But on one key bill, Shulkin ended up siding with more moderate lawmakers in the Senate, who did not want to outsource as much VA care to the private sector as the White House was seeking.

The friction led to a rift between Shulkin and White House officials. Selnick and Caldwell said Shulkin was speaking out of both sides of his mouth - telling the White House and CVA he supported their plan, while telling other senators and traditional veterans groups the opposite.

"Behind the scenes, he was not being supportive," Selnick said.

Shulkin did not respond to requests for comment.

By February, when a blistering inspector general's report found "serious derelictions" surrounding a 10-day trip he led to Europe last summer, Shulkin had already begun to lose his standing in the White House.

He pushed back, accusing Trump's VA appointees of trying to undermine him. Traditional veterans groups attempted to defend Shulkin, whom they saw as a bulwark against further outsourcing of VA care.

In late February, top veterans advocates met with White House Chief of Staff John Kelly, hoping to persuade him and the president to keep Shulkin as VA secretary. To their surprise, the White House had invited Caldwell, of CVA, to attend the meeting. Kelly told the groups that Shulkin was safe, but he rejected claims that the secretary was a victim of rebellion in VA's senior ranks, saying Shulkin needed to take control of his staff, according to participants.

A month later, Trump fired Shulkin in a tweet.

In interviews after his ouster, Shulkin repeatedly blamed his removal on administration officials and their allies, who he said were trying to privatize VA's health-care system.

In response, the White House armed CVA, Hegseth and other conservative groups with talking points to rebut Shulkin's claims to the media, casting them as "lies" and providing backup material showing contradictions in his story, according to a document obtained by The Washington Post.

For its part, CVA - which had refrained from publicly calling for Shulkin's firing - commended his departure.

"Secretary Shulkin made significant headway in reforming the department," the group said, "but ultimately became a distraction from the important task of improving health care for our veterans."